GLP‐1 is a peptide hormone from the intestinal mucosa. It is secreted in response to meal ingestion and normally functions in the so‐called ileal brake, that is, inhibition of upper gastrointestinal motility and secretion when nutrients are present in the distal small intestine. It also induces satiety and promotes tissue deposition of ingested glucose by stimulating insulin secretion. Thus, it is an essential incretin hormone. In addition, the hormone has been demonstrated to promote insulin biosynthesis and insulin gene expression and to have trophic effects on the beta cells. The trophic effects include proliferation of existing beta cells, maturation of new cells from duct progenitor cells and inhibition of apoptosis. Furthermore, glucagon secretion is inhibited. Because of these effects, the hormone effectively improves metabolism in patients with type 2 diabetes mellitus. Thus, continuous subcutaneous administration of the peptide for six weeks in patients with rather advanced disease greatly improved glucose profiles and lowered body weight, haemoglobin A_1C, and free fatty acids (FFA). In addition, insulin sensitivity doubled and insulin responses to glucose were greatly improved. There were no side effects. Continuous administration is necessary because of rapid degradation by the enzyme dipeptidyl peptidase‐IV. Alternative approaches include the use of analogues that are resistant to the actions of the enzyme, as well as inhibitors of the enzyme. Both approaches have shown remarkable efficacy in both experimental and clinical studies. The GLP‐1‐based therapy of type 2 diabetes, therefore, represents a new and attractive alternative. Copyright © 2002 John Wiley & Sons, Ltd.